Sunday, September 10, 2006

Recently the Big Ten decided to create it's own television channel to broadcast it's Olympic sports as well as revenue producing sports beginning next year. DIRECTV has agreed to carry the channel in it's lowest tier, meaning that all customers with Total Choice and above would receive the channel. A coup for the Big Ten with that satellite network. If they reach similar deals with Dish Network and the various major cable companies then they will be off an flying.

Much speculation circled around the Big East doing the same. The Sports Business Weekly is now reporting the Big East conference gave it serious consideration to do just that...launch it's own national television station. In the end, Mike Tranghese believed going with ESPN and signing a long term deal meant more exposure to the league and guaranteed them almost 90 million television households (there are approximately 106 million in the USA) with ESPN's long term contracts with various cable and satellite systems. Instead of negotiating carriage rights with the various television distributors across the country, the Big East went with ESPN instead.

Sports Business Weekly is now reporting that the Big 12 and the SEC are also exploring channels of their own, but nothing is a slam dunk.

Here are some various excerpts from Sports Business Weekly on this subject.

Big East picks ESPN over starting own network

While the Big East was negotiating its latest television deal with ESPN over the past several months, it seriously considered launching its own TV network, following the recent example of the Big Ten and Mountain West conferences.

But the BigEast eventually decided too many risks were associated with setting up its own regional sports network and opted to go the safer route to guaranteeing wider distribution for its programming for a rights fee that's said to be close to $200 million over the six-year deal.

"I want our fan base to see our games," Big East Commissioner Mike Tranghese saidlast week when announcing the conference's deal to stay with ESPN, with whom it has had a relationship since 1979.

The BigEast's announcement came just three days before the launch of the nation's first college conference RSN, Mountain West's The mtn., and illustrated the thought process every conference will go through as their current TV deals expire.

Essentially, conferences have two choices. They can launch their own network and control their programming and ad inventory, similar to the Big Ten and Mountain West. Or, they can cut a wide-ranging, multiplatforrn rights deal with an established programmer, such as ESPN or Fox Sports.

The Big 12 is the ncixt major conference to face the choice. Its ABC/ESPN deal expires in the spring of 2008.

The SEC's current deal with CBS, ESPN and Lincoln Financial ends in the spring of 2009, and the conference is exploring the possibility of an SEC TV channel, said Charles Bloom, the conference's associate commissioner.

"But it's not a slam dunk," Bloom said. "We're not going to jeopardize what we have already ...We're very happy with what we have now. We're asking ourselves how we can add to it and how we can make it better."

To launch the Big Ten Channel next August, the Big Ten is partnering with Fox, which will pick up the startup costs. The conference and Fox will form a limited liability company that will pay the conference an annual rights fee.

Due in part to the growing number of cable and broadband channels, schools and conferences are less concerned about their high-visibility football and basketball programming and focused more on finding a home for Olympic sports, such as volleyball, field hockey and soccer.

"One of the growing trends is developing added exposure for J Olympic sports," said Brian Ullmann, assistant athletic director for the University of Maryland.The Big Ten'slaunch will provideahome for those non-revenue-generating sports. The conference still will get distribution for its bigger games through a 10-year, $100 million deal with ABC/ESPN.

It also will be able to retain control over when its teams play their games and which sports to promote. Its investment will grow wildly if the channel gains enough distribution.

Distribution, though, is the biggest risk conferences face in launching their own channel. The mtn., for example, has been receiving negative local press detailing its problems in trying to launch in several of its conference's markets, particularly on systems run by Cox Communications, which is taking a hard line with the RSNand refusing to pay its carriage fee.

"We don't feel a need to compete [with satellite and telephone companies] on video content as much as we did before," said Bob Wilson, Cox's senior vice president of programming, citing the fact that video brings in "well under" 50 percent of Cox's revenue. "That allows us to not have to accept all deals and offers that come our way"

The Big East decided that ESPN could provide adequate coverage via its broadcast, cable, broadband and mobile platforms while also affording it a steady rights fee.Also contributing to the Big East's decision to extend with ESPN was the sports network's broadcast syndication arm, which sells games to over-the-air stations in conference markets.

"We're getting into all of the cable entities that we would have wanted to get into with our own channel," Tranghese said.

In the end, we will have to see if this was the correct decision or not. There is a tremendous amount of money and risk in launching any new station and from that perspective, I would say that the Big East made the correct call. However, they do have to adhere to the 500lb gorilla in ESPN as part of that process which is never easy. The Big 10 Channel has a tremendous upside if they can get distribution. I have no doubt they will accomplish this in Midwest markets. Will other markets also pick up the channel...will they truly have a national base to reach? That remains the question.

Interesting. I didn't know that the BE at least considered it. Pity they never went with it.

I disagree with your view, of course, in part because of the football part of the equation. Understandably that isn't a real concern of yours, but is for me -- again part of the reason I have always believed a split was necessary.

Conference networks are topic that I discussed at The Business of College Football and thank you for bring this article to light. This topic is one that could go either way. The Big 10 network might have some strong markets but what will they fill the time with? Will anyone watch field hockey? Where will the money come from? On the other hand, control is important and people be willing to pay plenty for less.